Pay protection in lesser role could amount to a reasonable adjustment

7th August, 2017

NEWS

The Employment Appeal Tribunal has held that the duty to make reasonable adjustments for a disabled employee could extend to continuing to pay a higher salary to an employee who is moved to a lesser role.

IMPLICATIONS

The Employment Appeal Tribunal’s view was that there was no reason in principle why the duty to make reasonable adjustments should be read as excluding any requirement to protect an employee’s pay in conjunction with other measures to counter the employee’s disadvantage through disability.

As a result, employers will need to think not only about offering alternative work to disabled employees as part of their duty to make reasonable adjustments, but will also have to think carefully whether it is reasonable in such circumstances to reduce the employee’s pay, if the role is a lesser role, or whether it is reasonable to shoulder the extra cost and to ensure a level of pay protection for the disabled employee.

DETAILS

In G4S Cash Solutions (UK) Ltd v Powell, Mr Powell had been employed by G4S as a Single Line Maintenance Engineer as part of G4S’s business of replenishing and maintaining automatic teller machines (“ATMs”). Mr Powell suffered with problems with his back which in 2012 worsened to the point that he was no longer fit for jobs involving heavy lifting or work in confined spaces. It was accepted by both parties that he was disabled for the purposes of the Equality Act 2010.

In the summer of 2012, G4S created a new role to support the ATM engineers. This role was described as a “key runner” and involved driving to various locations to deliver keys and parts to engineers. Comparative to the Single Line Maintenance Engineer role, it was relatively unskilled and represented a lesser role.

Following his return to work after a period of absence, Mr Powell began work in the alternative key runner role, albeit retaining his original salary as a Single Line Maintenance Engineer. He was allowed to continue to undertake this role for more than 12 months without suffering any reduction to his pay.

G4S then announced to Mr Powell that it was prepared to make the role permanent in Mr Powell’s case but that given that it was a lesser role (not requiring engineering skills of the same level as the Single Line Maintenance Engineer position), G4S proposed to reduce his basic salary by 10% which it felt fairly reflected the lesser role that Mr Powell was now undertaking. This was not acceptable to Mr Powell and an impasse was reached. Eventually, Mr Powell was dismissed, although G4S remained willing to offer him the key running role but only at “the rate of pay for the job”. Mr Powell then issued a claim for unfair dismissal and disability discrimination.

At first instance, the Employment Tribunal upheld his complaints of unfair dismissal and disability discrimination. Mr Powell had sought to argue that there had been a variation to his contract of employment entitling him to work as a key runner at his existing rate of pay. The Employment Tribunal found that there was no such variation, and erroneously concluded that the employer was entitled to impose an adjustment on an employee without the employee’s consent. However, the Employment Tribunal went on find that the employer was required, as a reasonable adjustment, to employ Mr Powell as a “key runner” at his existing rate of pay.

G4S appealed in relation to the reasonable adjustment finding, and Mr Powell cross-appealed in connected with the finding that there had been no variation to Mr Powell’s contract. The purpose of this case note is to deal with the primary issue relating to whether it was a reasonable adjustment to maintain Mr Powell’s pay rate.

The Employment Appeal Tribunal found that it was well established that the duty to make reasonable adjustments may require an employer to treat a disabled employee more favourably than others. It was also well established that the duty may require an employer to transfer an employee to a different role. The Employment Tribunal could see no reason why the duty should be read as excluding any requirement upon an employer to protect an employee’s pay in conjunction with other measures to counter to the employee’s disadvantage through disability. The question will always be whether it is reasonable for the employer to do so.

The Employment Appeal Tribunal considered that it was not uncommon for a reasonable adjustment to involve the employer in some cost and gave the example of the cost of providing training or extra support or subsidising the wages of a disabled person who is less productive. It referenced the example given in the 2011 Code of Practice of modifying performance-related pay where it may be reasonable to pay a disabled employee at an agreed rate notwithstanding that more rest breaks might be needed.

It was concluded by the Employment Appeal Tribunal that the Equality Act 2010 plainly envisaged an element of cost to the employer, and that it could see no reason why a package of measures for the purposes of keeping the employee in work, which includes some pay protection, should not be a reasonable adjustment.

The Employment Appeal Tribunal did make the point however that in changed circumstances what was reasonable may at some point in the future cease to be an adjustment which it is reasonable for the employer to make; the need for a job may disappear or the economic circumstances of a business may alter.

COMMENT

Alex Payton says “Whilst this case states that pay protection for a disabled employee can amount to a reasonable adjustment, this will not always be the case. In this case, the employer had continued the arrangement for approximately a year and had led the employee to expect the change to be long-term. The main reason advanced for not paying the employee at the higher rate was said to be the likelihood of discontent from other employees. This was considered to be an unattractive reason.”

If you have any questions regarding the article or employment law please contact Alex Payton at [javascript protected email address]